The Bank of Canada today published draft policy guidance related to its risk-management standards for designated Canadian financial market infrastructures (FMIs).

The Bank of Canada adopted the Principles for Financial Market Infrastructures (PFMIs) in 2012 as part of its risk-management standards for designated FMIs. The Bank is developing supplementary guidance in coordination with the Alberta Securities Commission, l'Autorité des marchés financiers (Quebec), the British Columbia Securities Commission, the Manitoba Securities Commission and the Ontario Securities Commission to supply additional clarity on certain aspects of these new standards within the Canadian context.

The guidance published today relates to Standard 7 on liquidity risk. It clarifies how FMIs should establish a high degree of confidence in covering liquidity exposures; maintain sufficient total liquid resources; verify if liquid resources are sufficient; and adjust liquid resources, if necessary.

Comments on the policy can be emailed by 4 August 2014 to the Bank of Canada at .

A copy should also be provided to the Alberta Securities Commission at , l'Autorité des marchés financiers (Quebec) at , the British Columbia Securities Commission at , the Manitoba Securities Commission at and the Ontario Securities Commission at .

This is the third in a series of 10 FMI risk-management guidance notes that the Bank of Canada will publish for consultation. The full list of guidance under development is available on the Risk-management standards for designated FMIs page in the Financial System section of the Bank’s website.

The Bank will share all comments received through this consultation with the authorities involved in the development of the guidance and will post the comments on its website. Once the guidance is finalized, the Bank and the provincial authorities listed above will consult with designated Canadian FMIs about timelines for aligning with the new guidance.